Earnings call transcript: Ratos Q1 2026 shows strong financials, EPS up 81%

Ratos posted a strong Q1 2026 print, with adjusted EPS up 81% year over year to 67 öre, net sales up 3.4% to SEK 4.49 billion, and adjusted EBITDA up 21% to SEK 460 million. The beat was driven by industrial products, especially Diab’s 16% organic growth, while industrial services remained softer and FX was a headwind. Shares rose 0.95% on the release, and management reiterated its Ratos 2030 strategy and focus on profitable, capital-efficient growth.

Analysis

The market is likely underestimating how much of this quarter’s strength is mix-driven rather than a clean cyclical upturn. The incremental earnings power is coming disproportionately from defense-linked industrials and from portfolio reclassification/cost rationalization at the holding level, which means reported margins can stay elevated even if end-demand softens. That makes the next two quarters less about headline growth and more about whether the current mix can be repeated without one-off help from disposals, lower depreciation, or favorable tax effects.

Second-order, the biggest swing factor is not Ratos itself but the duration of the defense and infrastructure order book inside the portfolio. If the geopolitical backdrop keeps defense procurement elevated, names like Diab and Aibel should continue to outperform, while technical consulting remains the pressure valve: weaker utilization there can offset a lot of good news elsewhere. Speed Group is the clearest “show me” asset—automation should eventually lift margins, but near-term P&L drag means the stock may look optically cheap before the inflection actually arrives.

The balance sheet gives management optionality, but that cuts both ways: capital returns are now a credible catalyst, yet the board may prefer to redeploy into bolt-ons while valuations are still reasonable. The contrarian risk is that consensus extrapolates one strong quarter into a durable rerating, when in reality much of the EPS beat is non-linear and partially reversible. If FX stays volatile and industrial services don’t recover by late Q2/early Q3, the market can quickly re-rate this back to a low-quality conglomerate discount.

Key Decisions for Investors

• Long SEB / avoid chasing the initial pop: use any post-earnings strength to buy on a pullback over the next 2-4 weeks, with the thesis that the balance sheet and strategy reset support a 6-12 month rerating if organic growth stays >3%.
• Pair trade: long SEB vs short a more services-heavy Nordic industrial/consulting proxy over 1-3 months, as product businesses are currently carrying the group while consulting utilization remains the main earnings air pocket.
• Sell downside in SEB via 3-6 month cash-secured puts or put spreads: implied volatility should stay bid after a strong beat, while the stock has visible support from leverage at the low end of target range and potential capital allocation catalysts.
• If you want the cleaner thematic expression, overweight defense-adjacent industrial beneficiaries in the portfolio and underweight technical consulting exposure for the next quarter; the order flow is the strongest leading indicator here.
• Take profits on any momentum chase if Q2 commentary fails to confirm automation/margin inflection at Speed by late summer; that is the earliest point where the market can validate or reject the current earnings run-rate.